A new bipartisan committee’s working group will gather on Capitol Hill throughout the coming months to find ways to improve electronic health records, according to Senate health committee chairman Lamar Alexander (R-Tenn.) and ranking member Patty Murray (D-Wash.).

The group will work to find five or six ways to “make the failed promise of electronic health records something that physicians and providers look forward to instead of something they endure,” Murray said in an announcement.

All members of the Senate health committee are invited to be a part of the working group. Staff meetings begin this week, with participation from health IT professionals, industry experts and government agencies.

The working group’s goals include the following:

Help providers improve quality of care and patient safety.

Facilitate interoperability between EHR vendors.

Empower patients to engage in their own care through access to their health data.

Protect privacy and security of health information.

The working group isn’t the only way Alexander and Murray are pushing for change when it comes to EHRs.

Deprivation has a way of making you feel excessively thankful for even the most meager offering. Yoni Maisel, a reflective patient and patient advocate with a rare genetic primary immune deficiency disorder, conveyed just this sense of disproportionate gratitude in an exuberant recent piece describing the impact of technology on his life.

Inspired by Eric Topol’s new book, The Patient Will See You Now, highlighting the power of the smartphone (my WSJ review here), Maisel went out and bought one. He then received (on his smartphone) an email from a doctor who had read about the symptoms Maisel had previously described on his blog related to a second, extremely rare disease he has (Sweet’s Syndrome), and thought she had a patient with a similar condition. After viewing photos of skin lesions Maisel took (with his smartphone) and shared with her (with his smartphone), the doctor was reportedly convinced her patient had Sweet’s Syndrome as well.

Maisel tweeted enthusiastically that Topol’s book (and, implicitly, the technology he champions) “Just Played Part in Dx of 1in 1Million #RareDisease.”

A somewhat different reaction was shared by Rick Valencia, Head of Qualcomm Life, who commented, via Twitter; “Shocking that buying a smartphone and sending a pic considered a tech breakthrough. #onlyinhealthcare”

On the one hand, of course, Maisel’s story obviously represents a terrific outcome for the newly-diagnosed patient, and – precisely as Maisel and Topol emphasize – highlights one way smartphone technology can improve medical care.

At the same time, Maisel’s joy, paradoxically, also reminds us of a deep flaw in the system, as Valencia’s comment begins to suggest. At issue: poor data sharing, a medical tragedy of underappreciated dimension. Valuable, even vital information often remains uncaptured, unanalyzed, and, especially, unshared.

The human consequences associated with poor data sharing were poignantly described by Seth Mnookin in his New Yorker article last year profiling a family whose son, Bertrand was born with a mysterious disease that eluded rapid identification. The family (like an estimated 25% of patients with unknown genetic disorders) was able to obtain a diagnosis by exome sequencing, yet struggled to locate others with a similar condition. It wasn’t until the father, Matt Might, blogged about it – and had the story picked up by Reddit and others – that he was able to locate others with the disease.

The key point is that the networks afforded by Reddit were fundamentally richer than any medical dataset. If someone – the father in the Mnookin story, the doctor in Maisel’s story – wants to find others who have similar genetics and phenotypes, they need to rely on public, non-medically-specific networks because these networks, while not purpose-built, are nevertheless far denser, and often, it seems, the best option available. The issue this speaks to is what I’ve heard referred to as Matticalfe’s Law, named by physician and informaticist John Mattison to suggest a variant of the familiar Metcalfe’s Law. (Disclosure: while I’ve no business relationship with Mattison, he is co-chair of the Global Alliance for Genetics and Health eHealth working group, on which I serve. Also, to offer my usual reminder/disclosure, I am CMO at DNAnexus, a company that makes a cloud-based platform for genomic data management and collaboration).

Metcalfe’s Law is the idea that the value of a network is proportional to the square of the number of participants – i.e. adding more people to a network increases value not linearly, but exponentially. It’s a key principle underlying the concept (and power) of networks (though not without its critics – see here).

Matticalfe Law, as Mattison explains it, is that “the value of data silos is very limited, but when deployed in aggregate yields a law of accelerating returns rather than a law of diminishing returns, similar to the network effect of Metcalfe’s law.” Mattison adds he “hybridized the eponym to distinguish it from the classical network effect, hence Matticalfe’s Law.”

One implication here is that if every cancer center, every medical center, every rare disease center shared their data fully, then as a whole, these data would be profoundly more valuable and useful. The chances that a patient with an unusual mutation and phenotype would have someone like them, somewhere in the world, would be so much higher.

So why isn’t this done?

For starters, most hospitals – even leading centers — are struggling to meaningfully organize the genetic and phenotypic data of their own patients in a fashion that can truly inform clinical decision making, as I discussed late last year; thus, you can argue that it’s hard to share with others what you can barely grasp yourself.

A second factor, of course is privacy; medical centers typically emphasize the special nature of medical data, and express concern about the fate of rich information in a shared dataset.

Yet, many experts are skeptical that this represents the true (or only) explanation; as Mnookin writes,

‘If you want to be charitable, you can say there’s just a lack of awareness’ about what kind of sharing is permissible, Kohane said. ‘If you want to be uncharitable, you can say that researchers use that concern about privacy as a shield by which they can actually hide their more selfish motivations.’”

In other words, even if top centers were able to collect and usefully organize phenotypic and genetic data on patients, would they share most of this information or silo it?

I’m not sure I know anyone who would bet against “silo.”

Whether consciously recognized or not, these data are perceived as representing a competitive advantage for the institutions and individuals who generated them (and notably, in this context, the “generating individual” is understood to be the researcher, not the patient!).

Leading cancer centers (for example) have more data than most other hospitals and practices – even though their total share of cancer patients is relatively small, as something like 85% of cancer care occurs in the community. In a world without rich data sharing, today’s top cancer centers enjoy a distinct competitive advantage; their datasets (and more broadly, their experience sets), while individually small in the absolute sense, are large compared to most community hospitals and practices. However, in a world with richer data sharing, these leading centers would arguably lose much of their competitive advantage – even though the global quality of cancer care would likely go up, driven by the knowledge the richer dataset would provide. Thus, it’s perhaps not surprising that most leading cancer centers talk up data sharing far more than they engage in it – at least at anything like the rich level that would be ideal to advance medical science. (Of course, there are encouraging exceptions to this generalization.)

The need for rich data sharing to accelerate what Andy Grove calls “knowledge turns” (link here – ironically but not surprisingly, preview only; JAMA has not made this open access) has both frustrated and motivated patient advocates such as Chordoma Foundation co-founder Josh Sommer, who has worked tirelessly to change the system (see here, also here).

Nevertheless, both in the context of scientific research and in the context of patient care, the unfortunate truth is that while it’s fashionable to profess commitment to data sharing, many hospitals, and many researchers, are reluctant to part with data.

“What if you owned a business and one of your competitors said: ‘I would like a list of all your customers, as well as information on their demographics and health history.’ You would likely say, there is no way I’m giving you a list of my customers.

Well in the case of healthcare, customers = patients.”

Instead, the idea of the moment seems to be “federated” datasets – the idea that everyone can keep their own datasets, but query engines could specifically extract the exact, relatively limited data they need, affording, it’s suggested, many of the benefits of data pooling but without incurring many of the risks. There’s a conspicuous “assume a can opener” quality to this strategy, but it’s worth watching because some very smart people (and organizations) are working intensively on this — and because it might be the best we can hope for.

One alternative to this idea is that patients could contribute their own data into datasets, which could be used for the common good. This is obviously attractive conceptually, but the challenge is more pragmatic: while some patients are both motivated and technologically adept, most patients struggle exhaustively just to get a handle on all of their own medical records, and most are unlikely to have the time, inclination, and ability to share – beneficial as this would be.

An idea I’ve been thinking about (see here, here) is the notion of the data-inhaling clinic, medical centers built around the premise of rich data collection and sharing, and offering genuine interoperability. Patients choosing to seek care here would explicitly want their data shared, and in turn would benefit from the data sharing of others. Consent to share data (which could always be withdrawn) would be a foundational condition of care at these centers, and a reason enlightened patients would seek treatment there (in addition to the empathetic care, which as always remains elemental). Institutions subscribing to this philosophy would not need to have the same owner, nor even the same EMR – just the same commitment to rich and complete data sharing among participating institutions. (Sharing data only among participants seems necessary, at least initially, to avoid free-rider problem; the point is that any organizations willing to share appropriately-consented data in substantial fashion could belong to the network.)

While some patients might not like this approach, those in favor would vote with their feet, and I can imagine that the rich, consented dataset the subscribing, data-inhaling clinics would build would rapidly exceed those available elsewhere in the world. Perhaps at this point, holdout institutions – which I imagine would include top academic medical centers – would finally relent and join as well.

The aspiration would be that in a world of rich data sharing, making diagnoses based on the combination of unusual symptoms and unusual genetics wouldn’t be exceptional, or even tweet-worthy; rather it would be — and should be — the expectation.

U.S. Surgeon General Vice Admiral Vivek H. Murthy meets with Dr. Jonathan Woodson, assistant secretary of Defense for Health Affairs, at the Pentagon on March 11, 2015, to discuss the Military Health System’s critical role in support of the National Health Strategy.

eaders of the Military Health System met with the newly confirmed U.S. Surgeon General at the Pentagon on March 11. Dr. Jonathan Woodson, assistant secretary of Defense for Health Affairs, and Air Force Lt. Gen. Douglas Robb, director of the Defense Health Agency, discussed military health and the MHS’ critical role in support of the National Health Strategy in their first meeting with Vice Admiral Vivek H. Murthy since his confirmation by the U.S. Senate in December 2014.

“Our partnership with the Public Health Service has been instrumental in helping the Department and the Military Health System achieve its mission,” said Woodson. “Public Health Service officers have worked side-by-side with us in our military hospitals and clinics, in our laboratories, in support of our global health mission, and as part of the medical team serving all of our beneficiaries. One of the most prominent areas where we have collaborated is on implementation of health prevention and wellness initiatives. I look forward to continuing to work in close partnership with Admiral Murthy to promote health and healthy behaviors for our force and all of our beneficiaries.”

The meeting gave the leaders the important opportunity to discuss the Military Health System as a strategic asset in support of national security objectives, and the important role DoD plays in supporting the National Health Strategy, especially in areas such as reducing obesity and tobacco use.

“Our military medical personnel are all members of the larger federal team focused on improving the health and wellness of the entire country,” said Robb. “I am privileged to have Public Health Service officers working with me in the Defense Health Agency on a number of critical health matters. We’re one team engaged in one fight. It was a great opportunity to show Admiral Murthy everything we have to offer, and to express our appreciation for the talented people the Public Health Service shares with us.”

Two years after releasing the white paper, and six years since enactment of the HITECH Act[2], the question remains. There is inconclusive evidence that the program has achieved its goals of increasing efficiency, reducing costs, and improving the quality of care.

We have been candid about the key reason for the lackluster performance of this stimulus program: the lack of progress toward interoperability. Countless electronic health record vendors, hospital leaders, physicians, researchers, and thought leaders have told us time and again that interoperability is necessary to achieve the promise of a more efficient health system for patients, providers, and taxpayers.

We were pleased that the Office of the National Coordinator for Health Information Technology (ONC) recognizes the concern of hospitals, providers, patients, and other stakeholders, and recently released a draft roadmap for interoperability. In it, ONC proposes[6] to work with stakeholders to develop minimal standards for the safe and secure exchange of EHRs. We appreciate ONC’s efforts to identify the steps necessary to achieve true interoperability of EHRs, but we are concerned that the draft speaks in generalities and does not address all of the concerns raised about interoperability in the REBOOT report.

The ONC roadmap provides a framework for responsibility, governance, and accountability in regard to the future development and implementation of interoperable EHRs. But instead of offering specific objectives, deadlines, and action items, ONC’s roadmap falls short on the nitty gritty technology specifics that vendors and providers need when developing IT products. We are left with many outstanding questions about how to achieve interoperability and how to address the cost, oversight, privacy, and sustainability of the meaningful use program.

Interoperability

A truly interoperable health system in local communities and across the country will enable physicians, hospitals, and other health care providers to seamlessly share patient information, such as medical histories or diagnostic tests, through a secure network. Sharing this information should improve care and reduce costs by allowing physicians to better coordinate care. For example, health information exchange between providers should prevent duplicative tests and harmful drug interactions.

After spending $28 billion[7] so far of the $35 billion total taxpayer investment, significant progress toward interoperability has been elusive. Stage 1 of the meaningful use program failed to include any meaningful health information exchange requirements, and lacked a vision to achieve interoperability. Instead, Stage 1 incentivized the widespread adoption of EHR systems that providers now say are difficult to use and lack the ability to exchange information without costly upgrades.

We are now well into Stage 2 of the Meaningful Use program and providers are struggling to meet even modest health information exchange requirements. According to a report[8] released by the Centers for Medicare and Medicaid Services (CMS) on February 10, 2015, only 131,905 out of more than 500,000—or roughly 25 percent—of eligible medical providers and hospitals had attested to either Stage 1 or Stage 2 for 2014. Responding to stakeholder feedback, CMS allowed more flexibility[9] to providers to meet Stage 2 requirements.

By remaining in listening mode, ONC proposed high-level goals for how to achieve interoperability, like building on existing infrastructure and empowering individuals, but the roadmap fails to outline real and actionable next steps. It is not enough for ONC to identify factors it believes are important. It must also delineate how it will find specific solutions to these concerns. The HITECH Act was clear: ONC is supposed to certify EHRs that can meet the program requirements for the meaningful use of EHRs.

Meaningful use of EHRs is supposed to deliver value to patients and physicians, but instead we have reports that have shown[10] that ONC certified products fail to deliver the value of easily exchangeable health information to better coordinate care. They are also incredibly expensive with no guarantee that providers purchasing certified products will achieve the Meaningful Use program requirements.

Indeed, through the ONC certification program, ONC has had the ability to achieve interoperability, but instead ONC is still struggling. Nothing makes this point more clear than this fact: Stage 2 meaningful use was promised to be the stage when health providers were interoperable yet we are well into Stage 2 and ONC is just now releasing its vision for interoperability with a high level roadmap.

We have seen many high-level documents on interoperability: the JASON reports, the Health IT Policy and Standards Committees’ reports, the Connecting Health and Care for the Nation: A 10-Year Vision to Achieve an Interoperable Health IT Infrastructure report, and the Federal Health IT Strategic Plan 2015-2020 report. All of these reports, as well as the ONC’s latest roadmap, are missing the same thing: practical and actionable steps to ensure a proper return on the American people’s investment.

Increasing Costs

In 2009, the Congressional Budget Office (CBO) estimated[2] that fully integrated interoperability would save the Medicaid and Medicare programs $12.5 billion through 2019. These savings have yet to materialize and with 50 percent of doctors unable to meet current program requirements, it is unlikely that taxpayers will see these savings [11]in the near future. Moreover, the number one complaint we hear from providers is the unexpected costs of maintaining and upgrading their systems.

ONC does not describe how it will determine the costs associated with the adoption of expanding interoperable platforms. Nor does ONC explain how it would evaluate cost or incorporate cost control into the development and scaling of interoperability. Provider concerns about the cost of complying with the program should be addressed in the roadmap.

We appreciate the notion[12] that as new models of care begin to reward providers for outcomes, changing incentives will reward interoperability. We agree. However, we live in the aftermath of the HITECH Act, where to date $28 billion have not resulted in significant improvements to clinical care coordination or quality. Without concrete immediate and long-term steps, tied into accurate, usable (and collectable) performance measures, we will continue to see a meager return on investment.

Lack of Oversight

One way to improve oversight of the program is to put in place measures to gauge success. ONC appears to be taking a step in the right direction by describing seven different lenses to measure and evaluate the quantity and quality of information flow within interoperable systems, such as who is exchanging information, and where and what type of information is being exchanged. However, without specific performance goals for each type of measurement, it is unclear how ONC will measure success. In addition to defining these metrics, effective oversight includes describing how the metrics will be collected, analyzed, reported, and used for decision making.

The fiscal year 2015 Omnibus Appropriations Act required ONC to issue a report on information blocking — the practice that EHR vendors, and sometimes hospitals and physicians, use to prevent electronic information exchange as a way to gain a competitive advantage in the health care marketplace. The report will give Congress a better understanding of the extent to which information blocking happens and a comprehensive strategy on how to address it. It will also provide a good example of how ONC exercises its oversight responsibility.

Patient Privacy at Risk

The security of patients’ personal health information in EHR systems is a real and immediate concern to us. According to a warning the Federal Bureau of Investigation (FBI) issued to health care providers in April 2014, the health care industry has the highest volume of cyber threats and the slowest response time. The industry “is not as resilient to cyber intrusions compared to the financial and retail sectors, therefore the possibility of increased cyber intrusions is likely,” the FBI stated[13]. Unlike a credit card number, the information contained in a patient’s health record is impossible to reissue. Health records contain financial records, personal information, medical history, and family contacts — enough information to steal and build a full identity or use for valuable research purposes.

The ONC roadmap describes collaboration across several government agencies to accomplish their security goals. It says the Department of Health and Human Services will work with the Office of Civil Rights and industry to develop and propose a uniform approach to developing and enforcing cybersecurity in health care in concert with enforcement of HIPAA Rules.

However, the roadmap lacks clear, obtainable goals regarding security requirements and implementation. Additionally, the costs for our future security infrastructure are unknown, as well as who will pay for it. As new cyber threats emerge every day, this administration must answer these questions quickly. The recent hack on a major health insurer that compromised personal information, including Social Security numbers and health histories, of tens of millions of Americans highlights the urgent need for an appropriate framework to protect patient privacy.

Program Sustainability

The long-term sustainability of EHR systems remains one of the biggest unknowns. ONC’s roadmap is surprisingly silent on this topic, which is stunning considering that there is only $7 billion in funding left from the HITECH Act. While the President’s Budget does request a significant increase in funding for ONC, the administration seems to ignore the reality that taxpayers have already committed billions of dollars toward a goal that is still vague.

According to ONC[14], implementing EHR systems range from $15,000 to $70,000 per provider. According to a September 2014 IBIS World Report [15]on EHRs, nearly 45 percent of physicians from the national survey reported spending more than $100,000 on a system. About 77 percent of the largest practices spent nearly $200,000 on their systems. However, even these estimates fail to consider upgrade and vendor costs associated with running these systems. Numerous stakeholders have stated that one large obstacle to interoperability and sustainability is the cost[16] of sharing data among different vendors.

ONC envisioned[17] the State Health Information Exchange Program would help facilitate this exchange, and taxpayers spent over $500 million on this effort. Yet, the program has failed to provide a long-term approach to information exchange. According to a RAND Study[18] published in December 2014, only about 25 percent of the nation’s health information exchanges are considered financially stable by those who run them. These programs’ inability to sustain operations without federal funding triggers more questions. With HITECH Act funding dwindling, we fear that time is running out for ONC to make meaningful advancements toward interoperability.

Looking Ahead

In listening to the concerns from EHR vendors and EHR users from across the care continuum, ONC has taken an important turn under the leadership of Dr. Karen DeSalvo. The previous ONC leadership did not understand the difficulty and enormity of creating government-approved products in a market that struggled to exist before government incentives arrived.

As a result, our nation’s health care providers are stuck with the huge cost of unwieldy systems trying to conform to government mandates. They are stuck adopting EHR systems which don’t fit into their established workflows. And if they actually want to share their patients’ data, they are stuck with even more costs imposed by vendors.

At the center of all this is the patient who must sit quietly in the exam room looking at her physician use a computer instead of directly talking with her, who likely has seen no better access to her own data, and who is struggling to understand why her doctor has such a difficult time getting her lab results.

That the ONC roadmap recognizes these concerns is a welcome change. High-level ideas are important, but we are concerned that without specific requirements and action items, we will not advance towards the goal of improving health care coordination and patient care, which was the intent of the HITECH Act.

What’s in an EHR? As the Department of Defense prepares to select a new electronic health record system, some are advocating that it go with an open-source solution—not just to benefit of the DOD but to use the $11-billion program to benefit the healthcare industry at large.

Why it matters to the DOD

Most commercial EHR systems are developed around FFS, which is not particularly relevant to the DOD.

In a new report released by the Center for New American Security titled “Reforming the Military Health System,” the authors argue that the selection of a closed, proprietary system would trap the DOD into vendor lock, health data isolation and a long-term contract with technology that will age rather than evolve.

Co-author Stephen L. Ondra, a former senior advisor for health information in the White House Office of Science and Technology Policy, tells Healthcare Dive that an open-source solution could more easily adapt to meet future modernization and interoperability needs, and could more creatively be tailored to the DOD’s requirements.

Ondra says most commercial EHR systems are developed around the fee-for-service revenue cycle, a model that is not particularly relevant to the DOD and its healthcare system. He says an EHR for the DOD should be focused on the clinical care management aspect of these programs, which would require lengthy and expensive modification.

He argues that a proprietary system would be inadequate as it would leave the DOD with a single vendor’s solutions. “You don’t have some of the creativity and innovation that an open source system would have because you’re limited to a single vendor’s view and skills,” Ondra says.

In addition, he notes, proprietary systems have less incentive to provide interoperability solutions because their business model aims to lock people into using that particular system.

“I think the commercial systems are very good at what they do,” Ondra said. However, “they are not ideally designed for efficiency and enhancement of care delivery, and I think the DOD can do better with an open source system both in the near-term, and more importantly in the long-term, because of the type of innovation and creativity that can more quickly come into these systems.”

Why it matters to everyone

“If the DOD goes with a closed, proprietary system, it could stifle innovation in the industry.”

Whoever gets that $11-billion award is going to have a lot of money to develop EHR technology—and whether they are serving an open or closed solution will determine whether the innovations remain stovepiped from the rest of the industry, notes report author Peter L. Levin, a former chief technology officer at the Department of Veterans Affairs.

“If the DOD were to choose to go with a closed, proprietary system, it has the potential of stifling innovation in the rest of the industry,” Levin says. “If they go with an openly-architected, standard space and modular system, then really in a very simple way, they are spreading the innovation resources around.”

“Instead of concentrating it all in one place and letting that vendor own all of the innovation, they’ll be able to nourish and support the various components that comprise these complicated enterprise resource platforms in a way that will not only be beneficial to the DOD and the country in the long run, but will tremendously benefit the country and other kinds of innovations now,” Levin said.

Imagine if consumers could only talk to people with same phone carrier.

Levin adds that the same arguments for the DOD to select an open-source EHR system apply to private healthcare systems as well. He asks consumers to imagine if they could only talk to people with same phone carrier, or only go to gas stations for their particular make of car.

He argues that private hospitals and private payers have been unwittingly supporting the continued isolation and segmentation of the commercial solutions.

“Healthcare suffers tremendously in terms of cost and outcome because of these isolated systems,” he says, “and that’s just as true for the private sector as it is for the public sector.”

Ondra adds that the DOD’s choice will set an example from which both open and closed source providers could learn.

“I think that a major government contract would send the message that the current systems, as good as they are, are not fully meeting the needs of clinical care in a way that is efficient for the provider,” he says.

“Going to an open source for the DOD gives the opportunity to have rapid development of things that are more helpful to care delivery, more efficient for the provider, because the customer then is the deliverer of care, and not the finance department of a care delivery system,” Ondra said.

Now that the Affordable Care Act (ACA) has expanded health care coverage and made it affordable to many more Americans, we have the opportunity to shape the way care is delivered and improve the quality of care systemwide, while helping to reduce the growth of health care costs. Many efforts have already been initiated on these fronts, leveraging the ACA’s new tools. The Department of Health and Human Services (HHS) now intends to focus its energies on augmenting reform in three important and interdependent ways: using incentives to motivate higher-value care, by increasingly tying payment to value through alternative payment models; changing the way care is delivered through greater teamwork and integration, more effective coordination of providers across settings, and greater attention by providers to population health; and harnessing the power of information to improve care for patients.

As we work to build a health care system that delivers better care, that is smarter about how dollars are spent, and that makes people healthier, we are identifying metrics for managing and tracking our progress. A majority of Medicare fee-for-service payments already have a link to quality or value. Our goal is to have 85% of all Medicare fee-for-service payments tied to quality or value by 2016, and 90% by 2018. Perhaps even more important, our target is to have 30% of Medicare payments tied to quality or value through alternative payment models by the end of 2016, and 50% of payments by the end of 2018. Alternative payment models include accountable care organizations (ACOs) and bundled-payment arrangements under which health care providers are accountable for the quality and cost of the care they deliver to patients. This is the first time in the history of the program that explicit goals for alternative payment models and value-based payments have been set for Medicare. Changes assessed by these metrics will mark our progress in the near term, and we are engaging state Medicaid programs and private payers in efforts to make further progress toward value-based payment throughout the health care system. Through Healthy People 2020 and other initiatives, we will also track outcome measures that reflect changes in Americans’ health and health care.

To drive progress, we are focusing on three strategies. The first is incentives: a major thrust of our efforts is to create an environment in which hospitals, physicians, and other providers are rewarded for delivering high-quality health care and have the resources and flexibility they need to do so. The ACA creates a number of new institutions and payment arrangements intended to drive the health care system in this direction. These include alternative payment models such as ACOs, advanced primary care medical-home models, new models of bundling payments for episodes of care, and demonstration projects in integrated care for beneficiaries dually eligible for Medicare and Medicaid.

Looking ahead, we plan to develop and test new payment models for specialty care, starting with oncology care, and institute payments to providers for care coordination for patients with chronic conditions. Three years ago, Medicare made almost no payments through these alternative payment models,1 but today such payments represent approximately 20% of Medicare payments to providers, and as noted above, we aim to increase this percentage. As part of this work, we also recognize the need to continue to reach consensus on the quality measures used and address issues related to risk adjustment in these new models.

Second, improving the way care is delivered is central to our reform efforts. We have put in place policies to encourage greater integration within practice sites, greater coordination among providers, and greater attention to population health. Through the Partnership for Patients, we have engaged U.S. hospitals in learning networks to focus on high-priority risks to patient safety and have already seen significant improvement. There is now a national program to reduce hospital readmissions within 30 days after discharge, which encourages hospitals to improve transitional care and coordinate more effectively with ambulatory care providers. Readmission rates are decreasing nationwide.2 Through the Transforming Clinical Practice Initiative, we will invest up to $800 million in providing hands-on support to 150,000 physicians and other clinicians for developing the skills and tools needed to improve care delivery and transition to alternative payment models. New Medicaid health homes, patient-centered medical homes, and efforts to reorganize care for people eligible for both Medicare and Medicaid are all designed to foster greater integration and coordination.

Third, we aim to accelerate the availability of information to guide decision making. The Obama administration has led a major initiative in health information technology (IT), focusing on the adoption of electronic health records (EHRs) and their meaningful use as a central avenue for transforming care. The proportion of U.S. physicians using EHRs increased from 18% to 78% between 2001 and 2013, and 94% of hospitals now report use of certified EHRs.3 Ongoing efforts will advance interoperability through the alignment of health IT standards and practices with payment policy so that patients’ records are available when needed at the point of care to permit informed clinical decisions to be made in a timely fashion.

HHS has made a commitment to enhancing transparency in the health care market. For example, the Medicare website enables consumers to compare data on the costs and charges for hundreds of inpatient, outpatient, and physician services. Information is available on the quality of hospitals, physicians, nursing homes, and other providers, enabling consumers to make better-informed choices when selecting providers and health plans.

The ACA established the Patient-Centered Outcomes Research Institute (PCORI), dedicated to generating information that can guide doctors, other caregivers, and patients as they address important clinical decisions; PCORI is working with the Agency for Healthcare Research and Quality to disseminate this information. In the years ahead, the research findings from PCORI, disseminated in part through EHRs, can bring critical clinical information to providers and patients when they need it most, at the point of care.

Although we have much to celebrate regarding increased access and quality and reduced cost growth, much of the hard work of improving our health care system lies ahead of us. Care delivered in hospitals was much safer in 2013 than it was in 2010: there were 1.3 million fewer adverse events between 2011 and 2013 than there would have been if the rate of such events had remained unchanged, and an estimated 50,000 deaths were averted. Still, far too many hospitalized patients — nearly 1 in 10 — have adverse events while hospitalized, and many people do not receive care that they should receive, while others receive care that does not benefit them. Growth of health care spending is at historic lows: Medicare spending per beneficiary increased by approximately 2% per year from 2010 to 2014 — a rate far below both historical averages and the growth rate of the gross domestic product.4 Survey data show that more than 7 in 10 people who signed up for insurance in the new health insurance marketplace last year say the quality of their coverage is excellent or good.5 However, it will take additional effort to sustain and augment the positive changes we have seen so far.

We are dedicated to using incentives for higher-value care, fostering greater integration and coordination of care and attention to population health, and providing access to information that can enable clinicians and patients to make better-informed choices. We believe that, by working in partnership across the public and private sectors, we can accelerate these improvements and integrate them into the fabric of the U.S. health system.